Electronic trading of financial instruments has been implemented on many exchanges around the world. Financial instruments that are commonly traded on electronic exchanges include stocks, bonds, commodities, futures, currency, and others. Trading of electronic instruments is a highly competitive activity and one that relies on speed in the making, processing and filling of orders. Electronic traders have a distinct advantage over traders who utilize other means of trading due to the increased speed by which an order can typically be made, processed and filled. However, among other electronic traders, this advantage is greatly diminished. Thus, there is an ever-increasing need to escalate functionality with the hardware and network resources available to modern traders.
At the electronic exchange, a centralized host computer provides the general functions of matching and maintaining orders and positions, maintaining price information, managing the daily online trading database, and conducting nightly batch runs. The host computer also interfaces with external networks to quote prices and to provide other information. Traders can link to the host through one of the external networks, either directly or through other servers or gateways. Regardless of how the link to the host computer is established, traders must use software designed to manage the electronic trading process. The software generates trading screens that enable the trader to obtain market quotes, submit orders, and monitor positions while various trading strategies, such as correlation group trading and price normalization, are employed.
As mentioned above, the success and profitability of electronic traders is highly dependent on speed, including speed in determining when to place an order and at what price, and the speed in which the order can be sent to the marketplace. Because of the importance of speed, it is desirable for electronic trading software and systems to offer features that can assist the trader in making trades as quickly as possible and at the best prices available. For example, it would be desirable to have an electronic trading system that displays information to the trader in an efficient format and in a way that enables the trader to quickly obtain needed information and submit trade orders with minimal user input. By improving the speed and efficiency in which information is made available and trade orders are submitted, the trader is able to recognize favorable trading conditions faster and place trade orders more quickly to improve the likelihood of getting those orders filled before market conditions change.